Why You Should Know Your Customer When It Comes To Business Debt Recovery Services?

When working for a new client, it can be difficult to predict whether that client will have cash flow problems and be unable to pay their invoices. When it comes to debt collection, it's important to know your customers well and know exactly who they are.

You may not go to work thinking you won't get paid, but being prepared and knowing as much as you can about your client will certainly help you and a commercial debt recovery agency collect the debt.

Do You Know Who You've Done Business With?

It may seem like a simple question, but it's crucial to pursue the right legal formalities from the start. Your client may be a Private Limited Company (LTD), Public Limited Company (PLC), Limited Liability Partnership (LLP), Sole Proprietor or Partnership.

When accepting customer orders, your client may pressure you to deliver goods or services as soon as possible. However, to protect your position, you should always ask your client to complete a credit application or account opening form before fulfilling their order.

Once you have this information, you can conduct a credit check that will help you assess the potential risks in dealing with your client and determine their ability to pay. If the credit check reveals that your client is at high risk of bad debts, it doesn't mean that you cannot work for them, but in such circumstances, it is advisable to request installments before carrying out the work.

Why Is This Information Important? 

If you have provided goods or services to a customer but they have not paid, you may need assistance in recovering payment. The information you should have from the start will help you assess your chances of success. If your customer cannot pay, there may be little point in bearing the costs or putting good money after bad. We will endeavour to recover the debt owed to our customers, but recovery may not be possible if the business has gone out of business or has no significant assets that can be used as leverage to pay the debt.

Crown Recovery is a commercial debt recovery agency in London with a cost-effective and streamlined process from pre-claim to judgment. But the real trick is being able to convert that judgment into cash for your clients.

Other Useful Information When Working For Individuals

Oftentimes, a repossession will be necessary to get your client to pay but getting to know your client will allow you to better determine which repossession option is best.

• Does your client own property?
• Does he drive a decent car and perhaps own it without financing?
• Do you know his bank account details?
• Is he currently employed? 

We can check the Land Registry to verify the ownership of property, and we have good working relationships with surveying agents who can frequently check our clients' employment status. However, the fact remains that we must know our clients when carrying out the work.

Other Useful Information When Working With Limited Companies

• Consider asking corporate clients for personal guarantees. Limited companies can go into liquidation quickly and without warning. 
• Make sure you know all trading addresses and registered office addresses, and consider what assets may be available to enforce any judgments we may obtain.
• If you have undisputed debts, it may be to your advantage to use the bankruptcy procedure as you may be able to get your money back more quickly.

If you require advice about business debt recovery services, please feel free to contact a member of our specialist team.